‘The tax planning conversation is a long-term process’

ACTIVITY The most interesting repercussion from the coronavirus pandemic is the axis shift away from paper-based workflow to an electronic model. Today three quarters of our staff work remotely, some or all of the time. This has allowed us to process compliancebased work more efficiently, opening up the opportunity to have a dialogue with clients

about more detailed tax planning.

The tax planning conversation is an ongoing, long-term process. As a firm that has been around for almost 100 years, we have been dealing with three generations of some client families. Understanding their hopes and ambitions helps us to tailor our tax advice to their individual circumstances.

We see an increasing awareness amongst our owner-manager clients of the need to have a clearly defined exit strategy. The Irish tax system has valuable reliefs for amalgamations and reconstructions that allow entrepreneurs structure their business affairs to maximise the potential for a successful exit. In our view, the most valuable tax reliefs to owner-managers are capital taxes reliefs around retirement and transfer of business assets to the next generation.

The most notable recent development in the tax compliance arena is the move towards real-time tax reporting. In Budget 2024 the Minister for Finance announced the move to

put VAT return reporting on a real-time basis. This all ties in with the gradual shift by the Revenue Commissioners away from traditional enquiry methods to the use of big data and sophisticated risk analysis models.

Taxpayers who find themselves the subject of Revenue investigations will confirm that it is a very expensive business, both in terms of senior management time and professional fees, and that is before the implication of any undeclared taxes is considered. At its most basic, good tax advice starts with instilling good habits in clients and encouraging strong adherence to the rules.

WARHOUSED TAX DEBT Our firm did not encourage clients to warehouse tax debt during the pandemic. When these warehouse tax debts fall due, the Revenue Commissioners will seek repayment and in default will use the collection tools at their disposal. It is inevitable that the first and second quarters of 2024 will see an uptick in liquidations as ‘the rubber hits the road’.